The fastest way to unleash the extraordinary value that is contained in communities of experienced, talented, and motivated people is to provide a substrate for them to trade their knowledge assets among each other.  When people get together around a purpose, they build things that create incredible social value. The Social Value Platform provides an electronic accounting system for social value.  In The Social Value Game, vendors deposit inventory into a strategic community of people and the community creates social value.  This new social value is then converted into monetary revenue in the next economic paradigm called Social Capitalism.

Introducing The Social Value Network:

The social value network is a debit card platform that allows for the trade of social currencies.  Using The Value Game method created by The Ingenesist Project, vendors can place socially valuable inventory into a social game.  The social entrepreneurs leverage that inventory to organize communities to build something together.  Other vendors will insert complementary inventory to drive social value in these increasingly organized communities.  These organized communities take on characteristics of “a virtual corporation” as both consumers and producers of goods and services.

Social Capitalism

The best reason for developing an alternate economy in social currency is to bypass the inefficiency of the monetary system at least temporarily so that true value and true wealth can be created.  Once true value is created, converting it back to a financial currency would be relatively simple.

Social Currencies

Social currencies account for your productivity in a community, not your productivity in a corporation.  Every time a gatekeeper extracts a fee from you, they expend your social value.  Taxes, user fees, ATM fees, convenience fees, commissions, subscriptions to automated services, all destroy social value irrevocably.  Every time someone asks you to fill in a web form, type out a captcha, walk through a full body scanner, or opt out of a privacy invasive application, they are spending your social value and stealing your information, period.  Hackers attack PayPal not you, yet ultimately you are responsible and subsidize their inefficiency with your own.

The Holy Grail of Marketing

Advertisers and vendors have long sought the holy grail of advertising – the ability to speak directly to the community of people who want their product.  Good vendors want to segment themselves from the bad vendors instead of engage in damaging price wars.  Customers want great service and a strong knowledge base of other people who use those products. Countless businesses want to support community activities with additional products or services.

Your Social Enterprise

Social Currencies are a frictionless way to conduct transactions, defeat spammers, hackers, info miners, while also building community doing the things that you love. Your information is valuable and you should have the right to give it away freely, trade it, or even sell it to whomever you choose.  Do you have an impressive social, creative, or professional set of knowledge assets but are bored to tears by employers who don’t care what you are passionate about?    Or, maybe you have just been laid off and over 40.  Have you ever wanted your own business?  Many people may be better off trading social currencies instead of chasing the greenback.

Editor’s note; The following analysis by Daniel Indiviglio from The Atlantic regarding a NYT article is foreboding of an unknown future.  Half insightful synthesis and half tongue-in-cheek, this article suggests that virtual currency may impact the current monetary system.  The conclusion is brilliant suggesting that the national debt could be paid in virtual currency.  It seems quaint now, but what would happen if the dollar fails?  During the Mexican Crisis, citizens emptied WalMart because today’s peso would be buy fewer Levies tomorrow – and it happened very fast. Get this and get it well: currency is a social agreement. People will trade what ever people agree to trade.

by Daniel Indiviglio

Is Virtual Currency A Real Problem?

All that time spent playing video games may finally be paying off. Literally. According to a fascinating New York Times article today, virtual currency — credits to buy stuff in video games — is being taken very seriously. China worries that make-believe video game money could affect its ability to control its money supply. As a result, it’s slapping limits on virtual currency. I’m not kidding.

From the NY Times:

Some people have even traded virtual currencies in China, and exchanged them for clothes, cosmetics and other goods. Last year, nearly $2 billion in virtual currency was traded in China, according to the China Internet Network Information Center. Some experts say they believe there is a much larger underground economy in the virtual world.

And it gets wackier:

Some smaller gaming companies have even set up what are called virtual sweatshops, cramped quarters where young people play online games to earn credits that the companies then sell at a profit to overseas customers in Taiwan, South Korea and even the United States.

So what’s the threat? The Times asks a telecommunications professor from Indiana University.

“This action shows that at least one government is concerned about the way virtual worlds challenge its control of society,” Professor Castronova said in an e-mail message Tuesday. “As virtual currencies take over more and more purchasing power, control over the effective money supply shifts from the central bank to the game developers.”

Interesting theory, but I’d rather someone whose background is a little closer to economics weigh in. Because currency isn’t my specialty, I consulted an economist far more qualified to talk on this than me: Randall S. Kroszner. He is a professor of economics at the University of Chicago’s Booth School of Business. He’s also a former Fed governor, so he knows a thing or two about central banks and money supply.

He couldn’t speak to the specifics regarding China as he is not familiar with the details. But I asked him whether virtual currency could really be a threat to money supply, in general. He said:

It could have an impact on currency demand and the so-called velocity of money.
It can complicate the task of a central bank in trying to anticipate what currency demand will be, but much like with other innovations (ex: credit cards, etc.) that hasn’t led to an undermining in the ability to control the money supply, but it does make the task a more challenging one for the central banks.

So virtual currency could make managing money supply more difficult, but so do other things like credit cards, which we probably think are okay.

I also think virtual currency seems like any other good — just more efficient as a means for exchange. For example, there’s nothing stopping people from trading ounces of gold for products. An exchange rate exists between gold and real currency. Wouldn’t a similar kind of exchange rate hold for virtual currency and real currency? Kroszner agrees:

In principle, it’s exactly the same thing as an exchange rate between a particular commodity, wheat, gold, television sets, and the local currency.

In theory, virtual currency could affect money supply. But that it would affect money supply in a very significant way seems like a stretch. As a result, China might intend to limit virtual currency for reasons more important to it than money supply concerns. Such reasons might include censorship aspirations or a dislike of black markets.

Whatever China’s rationale, I’ll be interested to see if similar controls turn up in other countries. I suspect it’s just a matter of time before Uncle Sam decides to slap some virtual taxes on virtual transactions here in the U.S. Maybe we can close the deficit with virtual money!